Chapter 10 Office and Insurance Collection Strategies Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc.

2 Learning Objectives  Define credit and collection key words terminology and abbreviations.  Define aging analysis.  Define accounts receivable and explain how it is handled.  Recite types of fee adjustments available to patients.  Name payment options available to patients.  Perform oral and written communication collection techniques.

3Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Learning Objectives (cont’d.)  List the names of the federal credit laws applicable to a physician office setting.  State the role of a billing service, collection agency, and credit bureau in the collection process.  Explain the purpose of small claims court in the collection process.  Name basic actions in tracing a debtor who has moved and left no forwarding address.

4Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Chapter 10 Lesson 10.1

5Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Cash Flow Cycle  Physician revenue largely from reimbursement by third-party payers  Insurance contracts with payers  Reimbursement provisions  Medical services not covered  Patient responsibilities  Reimbursement process

6Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Reasons for Accounts Receivable  Increased healthcare expenses  Health care perceived as a right  Legal proceedings  Insurance delays

7Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. New Patient Confirmation Letter

8Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Signs of Potential Nonpaying Patient  incomplete information on registration form  multiple changes of residence  questionable employment record  no business or home telephone  post office box listed with no street address; or motel address listed  incomplete insurance information  no referral

9Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Fee Adjustments  discount  cash discounts  financial hardship  write-offs  professional courtesy  copayment waiver  no charge  reduced fee

10Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Ledger Card Financial Accounting Record

11Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Communicating Fees  Be courteous at all times but express a firm, businesslike approach that will not offend the patient.  Never badger or intimidate a patient into paying; merely state the payment policy and educate the patient.  Inform the patient of the fee and any deductible and balance due in a clear manner.  Verify the patient’s copayment listed on his or her insurance card and collect this amount before the patient’s office visit.

12Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Communicating Fees (cont’d.)  Make it easier for the patient to pay rather than leave without making payment.  Do not give the patient an option by asking if he or she would like to pay now or have a bill sent.  Motivate the patient to pay by appealing to his or her honesty, integrity, and pride.

13Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Collecting Fees  Payment at time of service  Payment by check  Itemized statements

14Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Financial Agreement Form

15Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Demand Letter for Returned Check

16Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Itemized Statement

17Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Collection Decision Tree

18Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Billing and Collection Guidelines  First statement at time of service  Mail second itemized statement  Third statement 30 days later  First phone call/suspense  Second phone call with 5-day notice  Written 10-day notice with next steps  Take steps indicated in prior statement

19Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Payment Options  cash  check  credit card  online payment  debit card  e-checks  payment plans

20Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Credit and Collection Laws  Equal Credit Opportunity Act  Fair Credit Reporting Act  Fair Credit Billing Act  Truth in Lending Act  Truth in Lending Consumer Credit Cost Discloser  Fair Debt Collection Practices Act  Statute of limitations

21Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Chapter 10 Lesson 10.2

22Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Telephone “Dont’s”  Don’t raise your voice.  Don’t accuse the patient of lying.  Don’t act tough.  Don’t consent to partial payment.  Don’t debate.  Don’t report disputed accounts to collection agency or bureau.

23Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Collection Form Letter

24Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Multipurpose Collection Letter

25Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Collection Abbreviations

26Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Insurance Payments  History of accounts  Coinsurance payments  Insurance checks sent to patients  Managed care organizations  Medicare  Medigap insurance  Worker’s compensation  Suing a third-party payer

27Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. When to Use a Collection Agency  when patient says he/she won’t pay  when patient breaks promise to pay  when partial payments, but 60-day lapse  failure to respond  returned check  insurance company payment not forwarded  misinformation  can’t be located

28Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Collection Agencies  Choosing an agency  Types of agencies  Agency operating techniques  Agency charges  Agency assigned accounts

29Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Filing a Court Claim  Obtain claim of plaintiff form.  File papers with the court.  Pay the filing fee.  Arrange to serve the defendant.  Set trial date.

30Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Tracing a Debtor (“Skip”)  Check the address on returned envelope.  Check the ZIP code.  File a request at the post office.  Look in the phone book.  Call the primary care physician.  Check with hospital accounts department.  Inquire at place of employment.  Call contacts on patient’s registration form.

31Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Special Collection Issues  bankruptcy  terminally ill patients  estate claims

32Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Types of Bankruptcy  Chapter 7  Chapter 9  Chapter 11  Chapter 12  Chapter 13

33Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Filing an Estate Claim  Confirm death.  Pursue payment from third parties.  Contact the county.  File the claim.  Send itemized statement to the attorney.  Follow up as needed.

34Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Patient Complaints  Listen.  Thank the person.  Apologize.  Answer the complaint.  Be professional, sincere.  Take it seriously.  Respond in letter form.  Be cordial.

35Elsevier items and derived items © 2010, 2008 by Saunders, an imprint of Elsevier Inc. Other Considerations  Collection controls  Embezzlement  Precautions for financial protection  Bonding